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Wall Street Braces for Ugly Day; New Threat of Government Shutdown; Romney Tops New Hampshire; Georgia Executed Troy Davis; Apparent Radioactive Material Found in Libya; Satellite Falling Back to Earth; Wall Street Braces for Ugly Day; DOW Tumbles in Early Trading; God as "Economist-in-Chief"

Aired September 22, 2011 - 08:59   ET



And this morning we're beginning with politics and your pocketbooks. Stock markets around the world tanking and Washington gridlocked, yet again.

Kate Baldwin will tell us about the threat of a new government shutdown looming on the horizon. But, first, Christine Romans sets the stage for another ugly day on Wall Street -- Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: All right. Well, it doesn't look so good. You've got futures down here pretty sharply, Kyra. And it's probably indicating maybe a 200-point decline for stocks. For the Dow when things open.

Quite frankly, you've got stocks that are under the weather because of what the Fed said yesterday and disappointment quite frankly that, yes, the Fed did provide another stimulus, but they also said there was significant downside risks that remain to the economy, that's what's got markets around the world concerned.

You have the Hang Seng index. That's the Hong Kong stock average that closed -- it closed down more than 5 percent. European stocks down very sharply as well. Futures, as I said, in this country, down pretty stark.

The significant downside risk to the U.S. economy is what specifically is rocking markets here. That Operation Twist stimulus -- have you heard of this? Operation Twist is what they're calling what the Fed said it was going to do, it's where it's going to change the mixture of what kind of treasury securities it owns to try to keep interest rates lower. Long-term interest rates to $400 billion move in treasury securities.

But overall it's that idea that the Fed thinks that there are still significant downside risks, Kyra, that has people unnerved. Stocks are down. Oil is down big. Gold is down, as well. So you're seeing a real movement out of some of these commodities and stocks today on this idea that the economy is not out of the woods yet -- Kyra.

PHILLIPS: Yes. We'll be looking for the numbers in about 28 1/2 minutes.

Christine, thanks so much.

Now the threat of a new government shutdown and a tense round of voting. Lawmakers in the House rejected a spending bill. The move surprised even the Republican leaders.

Kate Bolduan joining now -- joining us now, rather, from Capitol Hill.

So, Kate, the government due to run out of money at the end of the month. So tell us what's happening behind the scenes.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Here we go, again, Kyra. It was quite a blow for House Republican leadership last night. I'll tell you.

In a vote, the final tally was 195-230, 48 Republicans, almost 50 House Republicans, joined with an overwhelming majority of House Democrats to reject this bill. This measure -- just to give a little bit of background. This measure is to keep the government funded, keep the government running through mid-November.

It also included additional funding for federal disaster relief to help with all the natural disasters, the flooding, the hurricanes, the tornadoes, the wildfires that the country has faced recently.

That's the background. Here's the problem that House Republicans -- Republican leadership faced. It was in two-part. Democrats oppose the amount of funding for federal disaster relief. They said it was inadequate and oppose the fact that House Republican leaders requiring that part of that disaster relief money be offset, be paid for by cutting money from another program, they said, was a job creator. To help create more fuel efficient vehicles.

The other problem that they had -- this may have been a bit of a surprise -- is that there is a big group of House conservative Republicans that opposed the fact that this overall bill, the overall spending number, didn't cut spending enough.

So those were the two problems that House Republican leaders faced and, bottom line, you said it. The government is to run out of money by the end of this month. That's a week from this Saturday. And the clock is ticking.

I'll tell you this really quickly and I'll read you a short statement from the number two Republican in the House, Eric Cantor. He's tried to be reassuring last night to say that the government will not shut down. He went on to say the following. "We're trying to affect change in a way that we spend taxpayer dollars. That's what this whole thing is about," he says. "No one is denying anyone disaster aid if they need it and we're trying to be responsible and to do the right thing."

Do the right thing, maybe, but right now they're threatening another government shutdown. I don't think -- and many Americans do not have the appetite for that right now -- Kyra.

PHILLIPS: Kate Bolduan on the Hill, thanks so much.

And many Americans blaming politics for the economy. Others believe an even higher power is guiding it. They say it's the invisible hand of God. Well, at the bottom of the hour, an interesting conversation about faith and finances.

Well, Republican presidential candidates are facing off in a debate tonight and our Paul Steinhauser has some new poll numbers that go right along with it.

Hey, Paul.


Listen, you know, Mitt Romney, Texas governor Rick Perry, the one and two in the polls right now. Perry basically been on top of all the national polls since he jumped in the race for the White House last month. But not in New Hampshire. Check out these brand new numbers from Suffolk University up there. They came out overnight.

And look at that. In a state that is next to Massachusetts where Mitt Romney was governor, he is well ahead of everybody else, continues to be well ahead of everybody else in New Hampshire at 41 percent of the support out there. Way ahead.

Look at that, 27 points ahead of Ron Paul who is in second place. Of course New Hampshire, very important president primary politics. They hold the first primary, it comes right after Iowa.

Let's go to the next number. This is in Florida. And Kyra, look at this one right here. You see Perry slightly ahead of Romney in this battle for Florida. And this poll from Quinnipiac came out this morning. And this is the first poll in Florida, Kyra, since our debate down there. Remember our debate about a week and a half ago in Tampa.

And as you mentioned, it comes before tonight's showdown. This is the second debate in Florida. This one is going to be in Orlando and it just shows how important Florida is becoming in the battle for the nomination. We know it's important in the general election. We all remember 2000. But it really is becoming a power player in primary politics, as well -- Kyra.

PHILLIPS: All right. Little bit of another talker that's going on, shall we say? Poor Rick Santorum. I can understand why the guy's not really happy with Google right now.

STEINHAUSER: Yes. And this has been going on for a while but he got so upset yesterday that he finally decided to talk about it.

We're talking about Rick Santorum. He's a former senator from Pennsylvania. He's also a Republican presidential nominee -- candidate, not nominee. Listen, if you Google his name, you're probably not going to come up with his official bio. No. You're probably -- the first thing you're going to see on Google is -- well, a description of him, a fake description of him, that has to do with animal waste or sexual waste and it's not too flattering.

Well, I'll let you Google it because I don't want to talk about exactly what it says right here on air. OK. So Santorum yesterday said enough is enough. He urged Google to do something about it. He said, listen, this is -- you know they could have taken care of this a while ago.

Google comes back and says Google searches are a result of -- or a reflection of the content information that is available on the Web. Users who want content removed from the Internet should contact the webmaster of a page directly.

So this one is not going to be ending so quickly, Kyra. A lot of comedians have had some fun with this one.

PHILLIPS: I can just imagine. And you know it's not easy being in the public eye. Run your name and you never know what's going to come up. I think all of us could identify with that.

Paul Steinhauser --

STEINHAUSER: Yes, ma'am.

PHILLIPS: Oh, boy. All right, we're going to have your next political update in just about an hour.

Paul, thanks.

And a reminder for all the latest political news, you can just go to our Web site

For the first time in more than two years, a pair of American hikers wake up to freedom. They could not get down those steps fast enough. Shane Bauer and Josh Fattal bounded down the steps of that airplane last night into the arms of their loved ones. Their arrival in the Middle Eastern country of Oman came just hours from being released from an Iranian prison.

The American Muslim and Christian Leaders had spent nearly a week lobbying Iran's president for their release. Bauer and Fattal were arrested and convicted of spying after wandering across Iran's border.

Twenty years after he was convicted of killing a cop and after some nearly unprecedented legal twists and turns, Troy Davis was executed, but the controversy over this case will not go away.

Martin Savidge joining us with more.

What a dramatic night. You thought it would happen at 7:00 p.m. Eastern Time and hours and hours later, still had not had an answer.

MARTIN SAVIDGE, CNN CORRESPONDENT: A lot of emotions. And all sorts of emotions that were felt throughout the evening.

You know there was a headline actually in the Atlanta paper that really kind of starkly summed it up, and it basically said, drama then death. Troy Davis had been scheduled to die, as Kyra just said, at 7:00 p.m. Eastern Time.

For his supporters gathered outside the state prison in Jackson and others around the world hope rose when his execution was delayed after his attorneys made a last-minute appeal to the U.S. Supreme Court and the high court began considering the case.

First it was minutes, then dragged on into hours. And those who had maintained that Davis was innocent of the 1989 crime of murdering a Savannah police officer began to see, just perhaps, a chance the Supreme Court would stop Davis' death.

It would not be that way. As the court of nine justices eventually denied the appeal and Davis' sentence was carried out four hours after it was originally scheduled. He was pronounced dead at 11:08 p.m. according to witnesses. And Davis maintained that he was innocent right up to the very moment he died.


JON LEWIS, WSB RADIO: He asked his family -- his family and friends to keep praying, to keep working, and keep the faith, and then he said to the prison staff, the ones he said who are going to take my life, he said to them, may God have mercy on your souls and his last words were to them, may God bless your souls. Then he put his head back down. The procedure began and about 15 minutes later it was over.


SAVIDGE: Anneliese MacPhail is the mother of the murdered police officer, Mark MacPhail. And here's what she had to say after that sentence was carried out.


ANNE MACPHAIL, SLAIN OFFICER'S MOTHER: It sounds awful. But it's kind of relief that it is over for me now. But I have to kind of digest all the things that have happened and today, too, which was, you know, very, very hard on me. So I just have to kind of work on that to my mind and I be alone and realize what everything happened and how it ended now.


SAVIDGE: Davis' supporters who had gathered outside the U.S. Supreme Court saw it differently. Saying that his conviction was based on the statements of witnesses, many of whom over the years since his trial had recanted their testimony. After his death was announced, the crowd shouted, no justice, no peace.

Then, Kyra, one thing is certain. This case focused attention on the death penalty in this country in a way we have not seen in a long, long time.

PHILLIPS: And we're going to actually talk about that next hour. How -- you know, is it possible to become more of a campaign issue as we approach presidential election.

Marty, thanks.

SAVIDGE: You're welcome.

PHILLIPS: Well, as you can imagine, the Troy Davis case made waves around the world, too.

Zain Verjee has been watching the headlines.

As you can imagine, the troy Davis case made waves around the world, too. Zain verjee has been watching the headlines.

So many people, Zain, coming out and speaking about this from former presidents all the way to the Pope.

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Right. That's exactly right, as well as Archbishop Desmond Tutu all weighing in and all saying, stop, don't do it. Let me just give you a flavor of the international news headlines. This is -- the "International Business Times" and they say Troy Davis execution a miscarriage of justice based on racial discrimination.

Now this goes on to say, "Troy Davis' execution has been hailed as a miscarriage of justice and yet, another illustration of racial discrimination, but despite calls from activists, politicians and even religious figures, the U.S. state of Georgia went ahead and executed the young man, even though doubts over his 1991 murder conviction that saw him become a symbol for global efforts to end the death penalty.

And take a look at "The Guardian," Kyra. "Troy Davis and the state of American justice." That's the headline. It says, "While the calls for Troy Davis' reprieve poured into Georgia from all over the country and the world, the likelihood is that a minority of those callers spoke with a Georgia accent. A fact that for a local prosecutor, a local judge, and a state selected board, probably mattered than the most famous named person who picked up the phone today -- Kyra.

PHILLIPS: Zain Verjee out of London, Zain, thanks.

And coming up, talk about special delivery. Police say a couple of Cincinnati Bengal football players were on the receiving end of a package of high-grade marijuana.

And compliments of NASA. An old satellite about to fall back to earth. But where and when it arrive is still a guessing game. That's next.


PHILLIPS: Well, all year we've been introducing you to some truly remarkable people. We call them CNN Heroes. Everyday people changing the world. And today CNN is announcing the top 10 CNN Heroes for 2011. Be sure to log on to and vote for the CNN hero who inspires you the most.

Want to take you to a story now that we're just uncovering in Libya. One of our crews there has apparently come across evidence of radioactive material unguarded and dangerously available to anyone. We're told with bad intent.

Ben Wedeman joining us on the phone just outside of the town of Sabha.

Tell us what you know, Ben.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): Yes, Kyra, we're a 15-minute drive northeast of the city of Sabha in the Sahara Desert. And we've come across two warehouses full of thousands of blue barrels, some of them marked radioactive on the ground. In one of those warehouses, we found several large plastic bags full of what appears to be yellow powder, which had been closed also with this radioactive paint.

Also at the site, we found something that gives you a reading on radioactivity, as well as films. As you may have seen in movies, they're used to give an indication of the level of radioactivity.

Now, it was lightly guarded. I stress the "lightly" by about three to four guys in their late teens, early 20s. And in fact, officials of the NTC came to us last night saying that they had found this site and that they were curious and somewhat concerned about the content of it.

PHILLIPS: Ben, any idea --

WEDEMAN: Now, we arrived at the site -- yes, Kyra.

PHILLIPS: Any idea who owns this?

WEDEMAN: Well, it was a military site. We've been through some of the offices and it was clearly something belonging to the Libyan military. We haven't found any documents yet indicating the nature of the site. It's mostly just sort of run-of-the-mill military paperwork.

But there is an office where we found, for instance, protective suits that are still on coat hangers and we found in the trash rubber gloves that had clearly been used fairly recently. They weren't too dusty or anything like that.

So, clearly, it was some sort of facility belonging to the Libyan government. Until quite recently, there were people manning it, but, of course, day before yesterday is when the NTC forces took over Sabha. So, it's only recently changed hands -- Kyra.

PHILLIPS: Ben, as you get more information, please, call into us. Appreciate that. Ben Wedeman, calling into us from just outside the town in Sabha there in Libya.

Well, checking stories across country now. Late last night in Tacoma, Washington, striking teachers said they agreed to a new labor deal -- thanks in part to the governor who helped broker it. Teachers will vote to ratify the agreement today and could be teaching by tomorrow.

A couple Cincinnati Bengal football players being questioned now about a package allegedly containing marijuana that was mailed to their home. Police found six more pounds of pot inside the home of Jerome Simpson and Anthony Collins in northern Kentucky. No arrest were made.

Pass the collection plate and grab some cash. A church in Morristown, New Jersey, holding a reverse offering this Sunday, giving away $30,000 to its parishioners. The church's pastor says it's their way of giving back.

So, keep your eyes towards the sky, because NASA expects more than two dozen pieces of dead satellite to actually fall towards earth some time tomorrow. CNN's John Zarrella tells us where it could land.


JOHN ZARRELLA, CNN CORRESPODNENT (voice-over): The clock is ticking. Sometime after midnight tonight, if NASA's calculations are right, an old dead satellite will re-enter the earth's atmosphere and burn up -- most of it but not all of it. About half a ton will make it through.

MARK MATNEY, NASA ORBITAL DEBRIS SCIENTIST: There are some pieces made of stainless steel and titanium and beryllium that have very high melting temperatures. And those pieces will survive. And we have a list of 26 pieces that range from a few tenths of pounds to a few hundred pounds in size.

ZARRELLA: You heard him right. Some of the chunks of junk could be hundreds of pounds. But there's no need for to you run out and buy hard hat. NASA's scientists in Houston say there 'very little risk that any debris from the six-ton UARS, upper atmosphere research satellite, will hit you.

JONATHAN MCDOWELL, HARVARD-SMITHSONIAN CENTER FOR ASTROPHYSICS: It could be hundreds of miles off in where it is coming down.

ZARRELLA: Harvard University astrophysicist Jonathan McDowell believes the space agency is probably right, because much of the earth is water.

MCDOWELL: This is not like the old Skylab scare of the '70s when had you a 70-ton space station crashing out of the sky. This thing is only six or seven tons. So I agree with the folks in Houston that it's really nothing to be terribly concerned about.

ZARRELLA: Parts of Skylab did hit Western Australia in 1979. So, where will this one come down? Well, no one knows. Even minutes before re-entering the atmosphere, NASA won't be able to pinpoint the exact location. The satellite is traveling so fast that it covers thousands of miles of space in just minutes. Right now, the impact swath covers portions of six continents.

MATNEY: Part of the problem is the spacecraft itself is tumbling and in unpredictable ways, and it is very difficult to very precisely pinpoint where it's coming down, even right before the re- entry.

MCDOWELL: If the thing happens to come down in the city, that would be bad. The chances of it causing expensive damage or actually injuring someone are much higher.

ZARRELLA: One thing is certain: once it hurts the atmosphere 50 miles up, it will take only a few minutes before the surviving pieces hit the earth.


PHILLIPS: So, John, not much warning or heads up, shall we say, for people hoping to dodge some of this fast-falling junk.

ZARRELLA: No, not at all. No heads up hardly at all. Once it hits, it won't be until it hits the atmosphere that NASA really knows exactly where it is going. Although they did say this morning that it will hit some time tomorrow afternoon U.S. time, but it will not be over North America at that time.

You know, Kyra, they say there's a 1 in 3,200 chance that someone on the earth will get hit by a piece of debris. But a 1 in trillions chance that it would be you as an individual. I don't understand that statistic stuff, but that's the way they put it.

PHILLIPS: Basically, it's just -- it more than likely is not going to happen to either one of us, John. Thanks.

ZARRELLA: Exactly.

PHILLIPS: We'll follow up tomorrow for sure. Thanks so much.

Well, Kirstie Alley's weight struggle has been tabloid fodder for years. But now, the actress says she lost 100 pounds and she's going to tell us how she did it.


PHILLIPS: Let's get straight to your "Showbiz Headlines."

After losing a whopping 100 pounds, Kirstie Alley says she feels back to normal. She looks pretty awesome. She's 60 years old now and she tells "People" magazine that after she was on "Dancing with the Stars," she just kept on dancing, every day. She also credited the weight drop to her new organic diet.

After giving Sarah Palin her own reality show, TLC announced "Big Hair Alaska" -- a series about her favorite hair salon in Wasilla. You can say the series premiere and finale were last night since the only two episodes made were aired back-to-back.

And Disney World in Orlando will host the very first Avatar land inspired by the movie. Construction will begin by 2013. And with two more "Avatar" films on the way, we may see more Avatar lands in the future.


PHILLIPS: Global stock markets selling off and we're expecting the same thing in just a few minutes.

Alison Kosik at the New York Stock Exchange.

So, Alison, let's talk about what's causing all these investors to get pretty nervous today.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, the reason, the sad state of the economy, Kyra. You know, when the bell rings in about five minutes, expect the Dow to drop at least 200 points. NASDAQ and S&P are expected to drop 2 percent today.

This is the following the action that we've seen overseas. Asian markets closed down 2 percent to 5 percent. European markets right now are losing 5 percent each.

Now, part of the reason we're seeing this worldwide selloff is because of what the Fed said yesterday. It said there are a lot of things that are hitting growth here in the U.S., including issues overseas. And then, overnight, some reports came out. Weak manufacturing reports from China and Europe.

And, you know what? When you put everybody together, and you put China together, with the U.S., with Europe, all of these countries really drive the global economy and they're all in the same boat. We also got the jobless claims today, Kyra, they fell by a fewer number than Wall Street had been expecting, not helping to give anybody any inspiration to buy into the market today -- Kyra.

PHILLIPS: Well, let me ask you what is going on with H.P. That's also making some news today.

KOSIK: It is. There's talk that the board may kick out its current chief executive. Leo Apotheker is the name. They may wind up bringing in Meg Whitman. You know her name. She's that corporate celebrity who is best known for running eBay, as well as running for governor of California.

And she turned eBay from a $5 million company into one with an annual revenue of $8 billion. At this point, H.P. is not commenting. Shares of Hewlett-Packard up 7 percent on that news. Apotheker actually has been CEO for only less than a year, and he's had trouble giving H.P. an identity at this point.

And Hewlett-Packard, you know, it's tried this tablet computer and that didn't catch on. So, recently, it killed it. H.P., at this point, is considering getting rid of its hardware business because computers don't make much any more to push -- so, what they're trying to push into software.

You know, this is one of the companies that was really, really strong and has had quite a downfall lately -- Kyra.

PHILLIPS: Alison Kosik, thanks.

Opening markets in just about a minute and a half. We'll take it for you.

And, also, have you logged on to Facebook recently. There's big changes and not everyone is really happy about it. We'll explain why that's taking place, next.


PHILLIPS: All right. Any second now, there we go. Dow Industrials, actually the numbers just popped up after the opening bell ran about 30 second ago. Dow Industrials already in negative territory. We were worried about this because the talk has been that it's going to be a pretty bad day and the numbers are continuing to go down.

Alison Kosik is watching it for us. We're going to talk to her. Can we bring her -- is she ready? OK, let's do it.

Alison Kosik, we were guessing it was going to be a pretty bad day today. And, look, the numbers have taken off in a pretty negative way -- already down 161 points.

KOSIK: Exactly, and falling as we speak. We're close to 200 points now down on the Dow. You know, we got an indication that this would happen yesterday here in the U.S. markets. When the Fed came out with its statement after having its two-day policy meeting, announcing this stimulus program to buy, to sell-off its short-term bonds and buy longer term bonds -- something that Wall Street had expected.

But the thing is, in its statement, the Fed said -- pretty much said, it expects the economy to continue to be weaker in the future and that kind of sentence, when Wall Street reads into it, it's not good.

So, what happened after that? Asian markets closed lower 2 percent to 5 percent and watching European markets lose 5 percent each. So, a lot of this is just sort of feeding off each other and as we see the Dow down 234 points -- Kyra.

PHILLIPS: Yes, and still diving. We will continue to follow the numbers all throughout the morning. Alison, please, stay up for us. Appreciate it.

All right. Facebook is holding its annual F8 Conference in San Francisco today. And apparently, we're going to hear about some pretty big changes. But if you've been on Facebook already, you've seen changes that have taken place.

Dan Simon is in San Francisco.

So, Dan, tell us exactly what's new.

DAN SIMON, CNN SILICON VALLEY CORRESPONDENT: Well, Kyra, first of all, let me say any time Facebook made changes in the past, there's always been a bit of a learning curve. There have been some groans. But I must tell you, this time, it is a bit different. Facebook has 750 million users and a lot of them are ticked off.

Let me talk to you about the two major changes that you're now seeing on the Facebook page. They have fundamentally altered the way you experience the site.

When you go to what's called the news feed, they have changed their formula, changed their algorithm and are now showing what they deem are the most important post. So, they're deciding for you what is most important. Second, they have added what is called a "Ticker." That is on the right-hand side of the screen. All the real-time updates that your friends are doing, you will now see in the Ticker.

Now, people think that these changes are confusing. They don't quite understand them, and some people think that the site is now a bit cluttered. The question is whether people overtime will accept them or Facebook will have to make some changes. We'll have to see what happens, Kyra.

PHILLIPS: And you're getting in the idea of what Mark Zuckerberg is going to say today. Can you brief us on that?

SIMON: Well, this is the Annual F8 Conference. This is the conference for developers. No doubt Zuckerberg will talk about the changes, but also expected to make major announcements, specifically with regards to music.

We believe that soon, you'll be able to listen to music right on Facebook. You'll be able to share music with your friends and experience music in a virtual way in real-time with your friends. That's supposed to be the major announcement today. Also, to make it easier to share video with your friends and also some changes to Facebook credits. That's the virtual currency that people use on Facebook, as well as some changes to its mobile offerings.

But the activities started at 10:00 a.m. local time, 1:00 Eastern, Mark Zuckerberg taking the stage here live in San Francisco.

We'll update our audiences later in the day -- Kyra.

PHILLIPS: All right. We'll be waiting for it -- Dan, thanks so much.

Well, Christina Warren writes for the tech website

And, Christina, some users are already coming forward and saying they're annoyed by these revisions. What exactly are they saying and what have you been receiving as feedback?

CHRISTINA WARREN, REPORTER, MASHABLE.COM: Well, in Nashville, we ran a poll, I guess it was two days ago, asking people if they love or hate the new design or if they're ambivalent. And so far, about 10,000 people have responded and 75 percent of them said they hate the new look.

A lot of people are writing and saying it's changed how they use the site. They can't find news the way that they used to. If things don't change back, they'll be leaving Facebook forever. Other users a little more understanding, saying they'll probably get used to.

But the general consensus is unhappy.

PHILLIPS: And speaking of unhappy -- do me a favor and, Christina, stand by.

Alison Kosik, I got to bring you in because we're watching these numbers right now. The Dow is just tanking, down 316 points. Since you and I talked a few minutes ago, it just keeps getting worse. The Feds spoke yesterday and we're seeing the reaction.

KOSIK: Exactly. And when we talked about what the Fed did yesterday, announcing the stimulus program. You know, there are a lot of people taking sort of two sides with the stimulus program. It's sort of being dubbed Operation Twist. And what that means is that the Fed is going to go ahead and look at its trillion dollar balance sheet and take $400 billion and sell $400 billion worth of short-term bonds and buy longer-term bonds in the same amount.

The idea is to push down long-term interest rates, try to spark more people to refinance their mortgage and get business to invest and expand and then hopefully hire. So, it's kind of this roundabout way that the Fed is thinking that they can get businesses to hire, because when you think about where the economy is right now, we need jobs in this economy.

So, this is kind of a way around it to try to spark that kind of job creation. But many people are saying, you know what, this program -- this big program that the Fed announced yesterday is really not going to do enough. And besides that, besides this program, the Fed came out in its statement yesterday, intimating that, you know what, we could be in for a rough one as far as economic growth goes.

And when you see that kind of statement from the Fed, that can really spook the markets and that's what really began the selloff yesterday when we saw the Dow fall 283 points by the time the markets closed. We saw that selloff yesterday and we're seeing it continue today, following in the footsteps of markets overnight and the Asian markets and European markets right now, Kyra.

PHILLIPS: All right. We'll keep watching it. Alison Kosik -- Dow Industrials down 317 points. It's going to be an ugly day, plain and simple. We'll be telling all of you, our viewers -- yes, go ahead, Alison.

KOSIK: Oh, no, go ahead. I'm just agreeing with you. It's going to be one of those days where you see the selloff kind of feed, everybody sort of feeding on what happened on the overseas markets and it's really hard to see where this will stop, at least for today.

You know, if we get some good news from somewhere, that could stop this kind of selloff, but I don't see that happening any time soon.

PHILLIPS: All right. We'll keep our fingers crossed. In the meantime, Alison, thanks so much.

And another story that's developing for us. You know, I just talked with Ben Wedeman by phone just a moment ago outside the town of Sabha there in Libya. Apparently, he was out, working a story and came across this warehouse on a military base and found evidence of radioactive material.

Ben Wedeman on the phone with us, again.

So, Ben, any idea who this belonged to? I know you came across it on this military base. And is there any signs that it has been used?

WEDEMAN (via telephone): Yes, this is -- as you've said, it's on a military base. And what it appears to be is yellow cake, which is sort of one of the rudimentary, it's uranium oxide compound, that is one of the precursors that eventually after much refining can become radioactive material or nuclear material for a weapon. But it's really just the initial thing.

Now, according to the International Atomic Energy Agency, they are aware, or were aware of this site that it did contain nuclear material or atomic material and, in fact, we did find one piece of handwritten paper that said 350,000 tons declared. Which would indicate that somehow this is what Libyan government, when it in 2004 decided to come clean on it, nuclear weapons program, declared that they possessed this material. They say yellow cake.

Obviously, the site is lightly guarded. At this point, I just had a conversation with an NTC field commander who said they are very eager for the international community to come in and help them identify this material and, they hope, take it away from here because it's relatively close to the city of Sabha and they're worried it could cause an environmental disaster, if there was any sort of explosion on this site -- Kyra.

PHILLIPS: Can you tell us exactly who has been guarding this and what they've told you with regard to what it was going to be used for, if it's been used at all, Ben?

WEDEMAN: Well, we've seen evidence that there has been activity on this site. We found a garbage bag with gloves, rubber gloves in it, which clearly had been used quite recently.

Now, the NTC, the rebels took over this site just yesterday afternoon. And, so, it's clearly been abandoned for a few days, but not too many days because it was only day before yesterday that this area fell to the rebel fighters. And, so, now, it's very lightly manned by this point I'd say a dozen fighters who have come in to try to improve the security here.

And it's not just -- it's not just yellow cake. It's also a lot of very old surface to air missiles and nearby crates and crates of rocket-launched surface-to-air missiles as well. And this is typical of a lot of what we've seen in traveling around Libya. Arms depots wide open to whoever wants to come in. Of course, this is a big difference given that it clearly contains radioactive material -- Kyra.

PHILLIPS: Ben Wedeman calling into us from the town or just outside the town of Sabha there in Libya -- Ben, we will continue to follow that story as you find more information.

Also, we're watching your money and the numbers right now. Not looking good on Wall Street, still in negative territory. Dow industrials down 286 points, it's expected to get worse. We are watching the numbers closely.

We'll be right back.


PHILLIPS: Well, we're just a few minutes into trading on Wall Street and investors brace for what could be a pretty rough day.

Looking at the big board right now Dow Industrials down 322 points.

Christine Romans, we sort of expected it wasn't going to be a good day. Now, the question is: can we rally or is going to get worse?

ROMANS: Well, look, late yesterday, you had the Fed come out and announce its new stimulus measure called "Operation Twist." It has been expected for weeks and weeks quite frankly.

But what the Fed said about the economy late yesterday, the Fed said that there are significant downside risks in the U.S. -- and that really spooked investors. To the rest of the world, that means that the U.S. is facing a rough patch in its economy and it comes at a time when Europe is facing problems from Greece and when China is showing signs of slowing down.

So around the world, you have this sort of fear that it's hard to find good news. It's hard to find any good reasons why economies are going to be growing robustly and unemployment is going to -- is to going to decline. And that's what you're seeing in this market.

Overseas, you saw markets move down sharply overnight. The Hang Seng Index in Hong Kong was down five percent. Whenever you see it move five percent it shows you there's an awful lot of fear in the market. In the end you had Shanghai down almost three percent and Tokyo down, Paris down and London down five percent each. Here in the U.S., before the markets even opened, we've had losses for the year. The S&P 500 is probably, Kyra -- the stocks in your 401(k) probably most closely match the S&P 500. The S&P 500 for the year was already down about seven percent.

So you can see the stock market has been telling us that there's fear about just how anemic the U.S. economy is here right now and nothing that the Fed said yesterday assuaged those fears.

So again, what I'm hearing from my sources and from economists and from people who've been watching the mood in the market, they're having a hard time finding something, anything to say looks good about the global economy right now. The most recent piece of economic news this morning, the jobless claims report.

Slightly fewer people filed for unemployment benefits but it was still 423,000. That's too many in a healthy economy. So significant downside risks, that's -- those are the three words that are -- are key here today.

PHILLIPS: All right, the Dow Industrials down 345 points right now. Christine, we'll keep talking.


PHILLIPS: Well, no matter where the markets close today, a lot of people believe it's God's will. According to the Baylor Religion Survey that came out this week, 20 percent of Americans, or one in five think God controls the economy.

Paul Froese is a sociology professor at Baylor, he co-authored that survey.

So Paul, let me ask you, if there is a significant number of people out there that think the economy works because God wants it to work, how do these same people explain like what we're seeing today? The reasoning behind such a horrible economy. Is it that God is punishing us?

PAUL FROESE, CO-AUTHOR, BAYLOR RELIGION SURVEY: That's a good question, a complicated question. The Baylor Religion Surveys are great because they have lots of questions about God and what we're finding, as you said, about a fifth think that God is guiding the economy.

But those fifth also think that God is an economic conservative. So that God favors the free market, lack of government regulation, low taxation. So, it could be that these people also believe that when the market is not doing well, that there's something going on with the government interfering in this. Because for these people, God's plan is for the economy to do well.

PHILLIPS: Now, economic conservatism, as you say, becoming a matter of faith. How did this all begin?

FROESE: That's a very complicated question. PHILLIPS: Am I asking too many complicated questions for a four- minute interview? I guess this would take an hour.

FROESE: Yes, exactly, exactly.

PHILLIPS: Yes, some much deeper conversation.

FROESE: Well, you know, I do have something to say on this point and that is kind of popular narrative is that a lot of religious believers began to vote Republican in the -- in the '80s for value reasons. Things like abortion and then later gay marriage.

But what we're finding in these latest results is that a lot of these religious Americans also have faith in economic conservatism. So they see that as a value.

PHILLIPS: Well and you sort of touched about -- touched on my next question, you write about this split between how more or less religious people view economic policy being evidenced by political rhetoric and you kind of went there a little bit when you were talking about certain issues. Explain that a little bit more for example when Obama speaks or when a Michele Bachmann speaks.

FROESE: Sure. And I just want to clarify before I go there that I'm not talking about religious versus non-religious people. I think, I'm talking about people who have different ideas about God.

So for instance, most Americans believe in God but most people when they hear the phrase, "God Bless America" take that very literally. They think God is controlling the United States and guiding the United States whereas other religious believers don't think that.

And so I think you can see this in the rhetoric of -- of the presidential candidates right now. So for instance, a Rick Perry or a Michele Bachmann, they talk very directly about God and they link that directly to their economic conservatism. And for the people who are probably going to vote for them, they think that economic conservatism is part of their faith.

Whereas, take President Obama, he also, of course, quotes scripture and talks about God, but he doesn't really link God to any kind of economic policy. And I think that's a big difference you can see in their rhetoric.

PHILLIPS: Paul Froese, thanks so much for joining me tonight, or this morning.

You can read more about the Baylor Religion Survey on our belief blog, and if you like, you can join the conversation and leave a comment.

And of course, we're also continuing to monitor the markets for you. Right now, the Dow industrials is down 360 points but we kind of braced ourselves for an ugly day and it looks like it's going that way. We're back in just a moment. (COMMERCIAL BREAK)

PHILLIPS: Looking at the Dow Industrials right now, we're continuing to watch the trading on Wall Street. Down 353 points, our Dow Industrials; it's going to be a pretty rough day. We are going to follow it with our Christine Romans and our Alison Kosik all throughout the morning.

All right. We'll take a quick break. We'll be right back.


PHILLIPS: All right. We're following lots of developments in the next hour of CNN NEWSROOM. Let's check in first with our Kate Bolduan -- Kate.

BOLDUAN: Hey there Kyra. Well, after a surprising vote in the House and a blow to House Republican leaders, Congress is inching closer and closer to another government shutdown. I'll have more details at the top of the hour.

ROMANS: I'm Christine Romans in New York, watching the big selloff in stocks. The Dow Jones Industrial Average down about 351 points now. The reason: looking around the world, the Fed, consumers, job seekers; the people who are job creators don't see very many reasons to be happy this morning. I'll tell you what could turn it around at the top of the hour.

MAX FOSTER, CNN INTERNATIONAL CORRESPONDENT: And I'm Max Foster in London with the inside track on how Kate, the Duchess of Cambridge, is being prepared by the palace for her future royal role -- Kyra.

PHILLIPS: All right guys. Thanks so much.

And millions of online poker players ripped off to the tune of $440 million. The feds are calling "Full Tilt" a Ponzi scheme. The professional player known as Fossil Man said, it could have been prevented. He joins me live next hour.


PHILLIPS: All right. Stories making news later today.

In roughly half an hour, Pope Benedict XVI addresses the German parliament in his first visit back to his native country.

Iranian president, Mahmoud Ahmadinejad addresses the U.N. General Assembly around noon Eastern time.

And 2:30 Eastern in Cincinnati, President Obama takes up his jobs bill.